Author Archives: Michael Giedzinski

Jobs Revised 5 Post

College Job Crisis result of student debt

Student debt has plagued college graduates for a ton of money that the government may never see. “Seven in 10 seniors who graduated from public and nonprofit colleges in 2013 had student loan debt, with an average of $28,400 per borrower. This represents a two percent increase from the average debt of 2012 public and nonprofit graduates,” according to one source. One of the problems with student debt is the lack of jobs available after graduation. Students who invest years and thousands of dollars are unable to find jobs. The problem is not their qualifications. There simply aren’t many high-paying jobs. A supply and demand issue is all. In recent news,aA Wall Street Journal article titled “From the At Work Blog: Survey finds many companies plan a hiring boost in 2015” says employers are looking to hire more graduates. This is good news given the high amount of US debt college students owe. According to the article, “Employers plan to hire 9.6% more new graduates than they did last year, according to a survey of 162 U.S. employers released Wednesday by the National Association of Colleges and Employers. Some 56% of employers plan to increase hiring, while 12% plan to have hiring remain constant, and 32% plan to decrease hires, the survey said. Employers said they posted an average of 148 openings, up nearly 50% from last year. In turn, the job market is no longer quite as tight for job seekers. Employers received an average of 23 applications per posting, down from 28 responses per posting last year, according to the survey.”

For young college graduates, the unemployment rate is currently 8.5 percent (compared with 5.5 percent in 2007), and the underemployment rate is 16.8 percent (compared with 9.6 percent in 2007),” states the following article. College debt is now over $1,000,000,000,000, and the economy has felt the impact of college students who are unable to financially support themselves without jobs that can cover the costs of tuition. When you have college students that are working minimum wage salaries, the entire point of college no longer exists. Students who take the opportunity cost of going to college to earn a degree are losing the money they would make working straight out of high school. Now, not only do they not have the money they would have made working, they also have to pay tuition that could have easily matched a steady income over several years. College students are said to earn roughly $18,000 more each year than students with no degree. With out of state college costs here at U of M, for example, some $40,000 a year, that’s roughly $160,000 a student could have saved. Not to mention the salaries they would have earned over the years they would have been attending lectures. This new increase in employers’ hiring plans is some good news for college students, although it won’t solve the college debt that America faces today. Actually, it won’t really do anything. The amount of college graduates is still going to outweigh the amount of new jobs available. College debt is still going to grow despite the new job openings. America is going to have face the music eventually, and employers as well as the government are going to have to find a way to allow students to pay their debts.

Employers Hiring More Graduates Next Year

More hiring cannot solve student debt

Some good news in the headlines today. A Wall Street Journal article titled “From the At Work Blog: Survey finds many companies plan a hiring boost in 2015” says employers are looking to hire more graduates. This is good news given the high amount of US debt college students owe. According to the article, “Employers plan to hire 9.6% more new graduates than they did last year, according to a survey of 162 U.S. employers released Wednesday by the National Association of Colleges and Employers. Some 56% of employers plan to increase hiring, while 12% plan to have hiring remain constant, and 32% plan to decrease hires, the survey said. Employers said they posted an average of 148 openings, up nearly 50% from last year. In turn, the job market is no longer quite as tight for job seekers. Employers received an average of 23 applications per posting, down from 28 responses per posting last year, according to the survey.”
College debt is now over $1,000,000,000,000, and the economy has felt the impact of college students who are unable to financially support themselves without jobs that can cover the costs of tuition. When you have college students that are working minimum wage salaries, the entire point of college no longer exists. Students who take the opportunity cost of going to college to earn a degree are losing the money they would make working straight out of high school. Now, not only do they not have the money they would have made working, they also have to pay tuition that could have easily matched a steady income over several years. College students are said to earn roughly $18,000 more each year than students with no degree. With out of state college costs here at U of M, for example, some $40,000 a year, that’s roughly $160,000 a student could have saved. Not to mention the salaries they would have earned over the years they would have been attending lectures. This new increase in employers’ hiring plans is some good news for college students, although it won’t solve the college debt that America faces today. Actually, it won’t really do anything. The amount of college graduates is still going to outweigh the amount of new jobs available. College debt is still going to grow despite the new job openings. America is going to have face the music eventually, and employers as well as the government are going to have to find a way to allow students to pay their debts.

Personality Tests In the Workplace

Personality tests in the workplace can be deceptive

As someone who is a soon-to-be college graduate, the search for work is not as easy as it used to be. I remember a time when all I had to do was submit a form to a job search engine, and the engine would then send the résumé to all potential employers that matched my criteria. As an econ student, I would search for marketing jobs. And a whole slew of employers would contact me saying they would like to talk. Sure, my bosses were there to see if I was the kind of person who would suit well for the workplace. Now, a new metric is being applied to weed out employees. A Wall Street Journal article writes, “In 2001, 26% of large U.S. employers used pre-hire assessments. By 2013, the number had climbed to 57%, reflecting a sea change in hiring practices that some economists suspect is making it tougher for people, especially young adults and the long-term unemployed, to get on the payroll. Employers are taking longer than ever to fill jobs, with the stepped-up search for excellence joining other factors that slow hiring, such as the reluctance to raise wages, and mismatches in skill or education between applicants and jobs. Companies aren’t settling for people with minimum skills; they want applicants who stand out in ability and workplace temperament, a new recruiting standard they say yields longer tenure and higher productivity.”

Using personality tests is a somewhat abstract way of telling someone worthy apart from the rest. Not exactly a pseudo science. Still, the test attempts to measure a human with questions that aren’t always answerable on a piece of paper. Another article written by the same author gives an example of what these tests are like. “Workers who apply online at RadioShack Corp. must say if they agree with the statement: ‘Over the course of the day, I can experience many mood changes.’ Lowe’s Cos. asks job seekers if they ‘believe that others have good intentions.’ A test at McDonald’s Corp.said: ‘If something very bad happens, it takes some time before I feel happy again.’” The right answers are easy to guess. The questions specifically ask for things the employers are looking to disqualify employees for, not questions that would result in work. Having said that, I think this is somewhat intrusive. Not to mention that it creates a paper trail of what used to be privileged to one’s psychologist. I think the government may need to watch these kinds of tests carefully, though I think they are not the organization to turn down the idea of a paper trail.

3-D Printing Has Potentially Deadly Uses

3-D printing may need serious regulation

3-Dimensional printing has been around for a while now. I remember when my Dad showed me a 3-D printed model car. He had created one at work, when they had just bought the machine. The user needs only to have a digital drawing of what to print, and the printer goes through, layer by layer, according to a specified degree of accuracy, until The applications of 3-D printing have since soared. Projects on KickStarter for 3-D printers have seen a huge amount of interest. And the medical field is also using 3-D printers to print organs that the body can adapt to. For example, a piece of artery printed out in plastic can help those with clogged veins. Now, according to a Wall Street Journal article, the 3-D printing world is moving to another planet.

“Dutch television producers chose 100 contestants in February to vie for a one-way trip to Mars. If all goes as advertised, winners might be landing there sometime in 2027. They’ll quickly need permanent shelter. The nearest Home Depot will be 140 million miles away. The only readily available construction material on Mars is sand.” The article continues “In Huntsville, Ala., Ms. Werkheiser, NASA’s 3-D print project manager, is starting to print curved walls and other structures using imitation Martian sand as an ink.” Although the market for 3-D printers on Mars may not drive sales for 3-D printers, the use of the printers serves to show what 3-D printing can solve.

 

I read an article about a 3-D printed gun, for example, and how the use of such printing can lead to issues such as a gun without any history could serve to get around gun laws. Not only can you print a gun, you don’t have to be an expert to design one. An army of folks with 3-D printers can all use the same digital model of the gun to print as many guns as needed. Now, don’t panic. The guns don’t look like any serious threat. They are somewhat crazy looking, and aren’t going to fire as accurately through a non-metal barrel. That doesn’t take away Uncle Sam’s worries. The guns are only an example of what 3-D printing can cause. A knife that is undetectable to metal detectors, for example, can be printed and taken through an airplane terminal. The world of terror could make 3-D printing a not-so-safe world to live in.

Import Prices Less, Fed Might Raise Rates

The Federal Reserve should not raise interest rates all at once

According to the Wall Street Journal, import prices are 0.3% less this month than a month ago. The reason is not related to oil. Oil did cause over a 10% decrease in prices last year, and this month all other industries have seen price cuts. “’Some of the weakness in inflation likely reflects continuing slack in labor and product markets,’ Fed Chairwoman Janet Yellen said in a speech in San Francisco last month. ‘However, much of this weakness stems from the sharp decline in the price of oil and other one-time factors that, in the FOMC’s judgment, are likely to have only a transitory negative effect on inflation, provided that inflation expectations remain well anchored.’

Friday’s report showed that the price of imported oil, which had brought down the overall index since last summer, picked up last month.” The real question is why are prices falling. US exports are 0.1% higher than last month, and this means the US is exporting more than it is importing, which should mean a stronger economy. Whether or not the Fed will see this as a time to raise interest rates is still debatable. The Fed is waiting for a sign of a stronger economy to raise the rates. And this might be the sign the Fed’s waited for. A moment where the economy could withstand the impact of rates that are likely to cause a lot of turmoil is exactly what the Fed would see as ideal to raise rates. There’s no guarantee that this waiting is going to keep any turmoil from crashing the markets.

The Fed has to understand that the decision to raise rates is going to have effects that are irrelevant of the state of the economy. I don’t think that the rates should be introduced all at once, and this article in the Wall Street Journal agrees. If the Fed were to raise the rates slightly, in order to combat inflation, and continue to do so over a period of time, then there is a chance that the effects of QE could be undone. There is no way can you expect that having printed billions of dollars a month for several years, and having pulled other countries into doing the same, that you can abruptly undo the effects of inflation with a single interest rate increase. The Fed would do best to keep interest rates as low as possible, like the frog in the pot story. Heating the pot too fast means the frog jumps out. Gradually raise the temperature and the frog won’t notice.

New Technology for Gene Modification

Gene modification technology can prove to harm society

I wrote an article a while ago that talked about how science may cross ethical boundaries in terms of life extension. The Wall Street Journal recently wrote an article about a new technology that can alter the human genome in embryos. The process would be used to eliminate genetic diseases that would normally be inherited. So, parents with a heritable disease can have children without diseases, who will then no longer carry the disease to future generations. This is only possible with a genetic alteration, as opposed to current methods that do not prevent the disease down the road. The Wall Street Journal article says “ The advent of CRISPR/Cas9 again sees a biomedical technology challenging norms and raising concerns. CRISPR/Cas9 makes it comparatively easy to modify germ-line inheritance by inserting, deleting or altering bits of DNA. It may be possible to make these alterations quite precise, with no undesired changes in the genome. Nevertheless, such changes would be inherited not only by the next generation but by all subsequent generations. Thus the decision to alter a germ-line cell may be valuable to offspring, but as norms change and the altered inheritance is carried into new genetic combinations, uncertain and possibly undesirable consequences may ensue.”

 

The article also brings up concerns for the misuse of this technology to alter genes that could affect things such as strength, intelligence, and other genetic features. The article continues, “The other, more unsettling kind of germ-line modification would involve attempts to modify inheritance for the purpose of enhancing an offspring’s physical characteristics or intellectual capability.” As I had mentioned earlier, the article I previously posted expressed my worry for what medicine could enable, and this article states that although we way ban such medical gene technology now, the technology is still being researched and eventually generations may decide to use such technology. That is somewhat worrisome at the least. Currently, you can get your entire genome scanned for under a few thousand dollars, and the technology is going to get more affordable. When everyone can scan their genome, the list of those who are carriers for a certain disease without having the disease are going to grow exponentially, as many who do not have diseases may still have children who end up with the gene. People who are at risk of passing on diseases are going to start to ask for the technology. I would argue that this is against the laws of nature. Sometimes people with certain diseases have other characteristics like the ability to deal with huge numbers without any help. The technology could end up harming society.

New Agriculture Technology to Increase Farming Efficiency

Farming will become more efficient due to a new technology aimed at pinpointing crops that are doing well

New technologies are being developed to increase productivity in agriculture. Though agriculture is somewhat late on the scene of high-tech optimization, the development of technology to scan fields at a time and make maps of which crops are doing well is going to revolutionize farming. Investors are already lining up for a share in these new technologies, as described by this Wall Street Journal article. The article states, “Corn and soybean farmers in recent years started adopting such ‘precision agriculture’ techniques to make better-informed decisions, and it’s spreading throughout the sector.

Thomas McPeek, for example, has adapted for Florida orange groves a laser-scanning technology used in architectural work to accurately measure every nook inside and outside a building. Positioned on a small truck that can cover 300 acres a day, a mobile scanning device developed by his company, AGERPoint Inc., analyzes how light reflects off trees to determine everything from the height and density of their canopies to which oranges or trunks are starved for water or afflicted with diseases or pests. It yields a map that some farmers are using to more precisely apply water, pesticides and fertilizer and treat ailing trees.”

Clearly, this new technology is ages beyond what currently exists in the agriculture sector. We thought that tractors were an improvement. Think of how lasers that pinpoint a crop to water will make efficiency a thing of the past. A more useful idea, in my opinion, would be technology that could discern the reason for why certain crops are doing better than others. This is most likely the next step. Whether these technologies are designed to increase productivity or decrease wasted pesticides, water, etc., they are sure to mean a higher yield of crops. The only thing that needs to be asked, other than the reliability of these technologies, is whether or not the cost of purchasing such technology is worth the investment, and when will farmers see their money. Many farmers may not find it affordable, and the years it would take to pay for the new gear could prove to be a wall for the market. The companies manufacturing this new technology must make sure that what they are selling is affordable. The one certain thing that brings down cost is time. Whether every field is robot-monitored someday in the future is still unknown. As with all technology, this will likely take root across the globe.

[Revised] Amazon Drones Banned From Further Testing

Government regulation of drones could prohibit innovation

I remember buying a toy drone a few years ago. It was the Parrot AR Drone, a toy that is controlled by a smartphone capable of flying nearly anywhere and taking video from an aerial view as well as a horizontal view. I still have a few clips on my computer of my neighbors’ houses, as well as my own, from about 200 feet in the air. Everything the drone saw was saved to a usb stick on board, as well as to my phone. Sure, it was a cool toy and fairly harmless in the right hands, however there is always someone willing to cross the law when it comes to power. If I had wanted to, I could have easily taken video of my neighbors’ windows, and this brings up privacy concerns for many. Especially with the recent drone that crashed on White House property, as detailed in this USA Today article, causing a huge lockdown and investigation, people have been on edge as to the safety and security of such unmanned aircraft.

Recently the FAA created new laws regarding the use of such drones. A Wall Street Journal article states, “Those safety requirements would limit commercial drone flights to below 500 feet, during daytime hours and within sight of the operator. Notably, the proposed rule would also ban flying commercial drones near airports or over people not involved in the drone’s flight.” The article continues with the following statement, “As the FAA works to complete its safety rules, its current effective ban on the commercial use of drones will remain in place. The only exceptions to that prohibition so far have been FAA approvals for 26 commercial-drone operators, but those approvals came with strict rules, including that operators have a private pilot’s license.”

Amazon, the world’s largest online retailer, has been developing a new type of delivery drone for customers within a 10 mile radius of its shipping locations. Amazon Prime would have the option to have delivery by drones, except for the FAA’s new laws. Now, “Amazon has asked the Federal Aviation Administration (FAA) for an exemption from rules prohibiting the use of drones for commercial purposes.  With this request, the company has signaled that they are serious about transitioning the idea of thirty minute Prime Air deliveries from concept to reality,” according to a Forbes article.

It still remains a difficult industry to regulate, considering the volume of drones on the market today. How can the government truly crack down on all drones out there? And furthermore, should it? Can we really allow regulation of something that is really similar to a remote controlled airplane or helicopter? Although I see the potential risks, like remotely spying on someone, I think it might be somewhat paranoid to think that this is the only reason for buying a drone. Recreational flying is not always malicious. Still, there are many commercial applications that could prove useful. For example, drones could deliver first aid to medical patients. Or food for someone stuck in an avalanche. They can get to the scene faster than a helicopter. They can navigate through a building after a fire. As well as find survivors among wreckage such as a hurricane. Drones aren’t harmful, peoples’ use of drones can harm. That should definitely require regulation. Having said that, too much regulation can prove detrimental. And as Benjamin Franklin said, “They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety.”

McDonald’s Now Also Raising Employee Wages

Wal-Mart’s precedent is what led McDonald’s to raise employee wages

As I had written about in an article before, there is pressure from the world right now to increase the pay of employees for nearly every major chain following Wal-Mart’s decision to raise many employee’s wages, where I argued that many local chains will have to follow suit in order to stay in the market and prevent employees from seeking employment at other higher-paying places. A Wall Street Journal article details McDonald’s decision to follow in Wal-Mart’s footsteps, and even mentions the same Wal-Mart pay raise. “McDonald’s Corp. plans to raise wages by more than 10% for workers at U.S. restaurants it operates—fresh evidence of the rising wage pressure in the American labor market. Starting July 1, McDonald’s will pay at least $1 an hour more than the local minimum wage for employees at the roughly 1,500 restaurants it owns in the U.S. The move follows similar efforts by other major U.S. employers including Wal-Mart Stores Inc., which is raising hourly pay for 500,000 workers to at least $10 next year, and reflects wider public pressures over income inequality as well as intensifying competition for low-skilled workers. The increase doesn’t apply to employees of franchisees, which operate nearly 90% of the 14,350 U.S. McDonald’s stores—a fact critics seized on.”

The fact that 90% of stores won’t be getting the same pay raise causes me to think that this may be just a PR stunt in order to keep the fading McDonald’s name alive. We’ve seen some crazy efforts such as the campaign where customers could receive free meals for performing stunts such as complimenting someone else, or dancing in a conga line. Whether or not this is just another effort to garnish public acceptance, or if it’s a serious attempt at justice for its employees (something I don’t think any major corporation considers a goal), McDonald’s decision will likely have the same impact on other chains that Wal-Mart’s decision had on McDonalds. McDonald’s is not a career for most, and they often higher and rehire students and poor folks looking to earn enough to get by. This is likely going to keep people interested in applying for work, and the news coverage is definitely going to help. Whether it will actually become a feasible career is unlikely, due to the nature of what working at McDonalds means. The pay raise will surely help those affected, and chains following, if only in the same non-franchise manner, will also be a likely effect.

Markets Up on News of Company Mergers

Thesis: Many companies are merging to cut out costs and take over markets

The Dow Jones has seen a major increase in its index due to the recent mergers of several companies. I recently wrote an article about the buyout of Kraft by Heinz Co., and how the expected revenue of the new company is projected to place it in the top 5 food companies of the world. An article in the Chicago Tribune states the market has seen a lot of new such mergers, “Chevron, ExxonMobil, and JPMorgan Chase added more than 2.3 percent as oil companies and banks rallied. Catamaran jumped 24 percent after UnitedHealth Group agreed to buy it. Horizon Pharma rose 18 percent after saying it will acquire Hyperion Therapeutics. A Standard & Poor’s index of homebuilders climbed after pending home sales in February rose more than forecast.The Dow climbed 263.65 points, or 1.5 percent, to 17,976.31 at 4 p.m. in New York, its best gain since Feb. 3. The S&P 500 index advanced 1.2 percent to 2,086.24, headed for its longest streak of quarterly increases since 1998. With a 0.2 percent increase on Friday, the index completed its first back-to-back gain after 28 days, the longest drought since 1994. The Nasdaq composite index rose 1.2 percent.”

Why are so many companies creating mergers? I’d say the answer may be that this is simply a sign of the times. In order to maximize profits, companies are forming super-companies that dominate markets and push America towards somewhat of an oligopoly. The failure rate of new startup companies has never been higher, and companies are looking for ways to squash competition. For a list of all the recent announcements of merging companies, read the following article. You’ll see there’s quite a few. The more serious thing to ask is what kind of an America this is creating, and what kind of effect these new companies will have on the consumer. Will everything end up a choice between the few companies on top? Not likely. There are anti-cartel laws in place to prevent such a future. Still, clearly there is something going on. In my unlicensed, professional opinion, I think industrialization is the main reason. As mentioned in the article I wrote earlier, this allows companies to cut costs and employees out when dealing with a larger company. Resources are already there, and the excess gets cut out. This move towards efficiency is hurting employees and cutting costs, and ultimately moving the US towards an oligopoly.